Now that tax, and tax return, season is upon us, maybe you’re thinking about purchasing a car. A tax return can make a solid down payment. Because cars are a depreciating investment, it is important to find a reliable car that fits your budget and won’t break down, causing extra bills and stress
1. What do you need from a vehicle?

Before you even start looking, you need to know what you’re looking for. It’s easy to buy a vehicle for emotional reasons, but because it’s a large expense, buying a practical car is a huge benefit to your financial well being.
Do you haul trailers or equipment frequently? Are you a commuter? Do you have a family or have hopes to start one in the future? All of these questions will help determine what kind of vehicle you should look for.
2. What can you afford?
Evaluate your budget. How much money do you have available to cover your loan payments, the cost of insurance, gas, and other routine maintenance? This calculator can help you evaluate how much you could afford to spend.
Putting as much money down as you can will help reduce the loan total and the interest paid, but an auto loan is also a good way to build credit if you can afford the payments. The interest rate, amount you qualify for, and monthly payments will depend on your past credit history and may require a cosigner. Visit your banker for some quotes and more information, and shop around. You may find a better deal at a different institution.
When researching vehicles, get some quotes on what your insurance costs are likely to be. This will vary with your driving record, age, sex, and type of car. Bottom line, if there isn’t room in your budget for the insurance, you can’t afford that car.
3. Is the vehicle actually a good investment?

This is a lesson I learned the hard way the last time I purchased a vehicle. Make sure that the vehicle you’re interested in buying is going to be reliable and not likely to require significant repairs after purchase, especially when buying from a private seller.
I didn’t take this seriously when I bought a pickup, and after a year and a half and over $3000 in repairs and tires, my transmission is dying and the cost of repair exceeds the value of the truck. Although I love driving it, it was a very unwise investment on my part.
So, request CarFax if buying from a used car dealership. If you’re buying from a private seller, bring a mechanically savvy friend or family member. If you don’t have one of those close by, ask the seller to let you bring the vehicle to a mechanic of your choice for a diagnostic report. This should cost about $50.00 and most sellers should be open to it. If they refuse, it’s best to walk away because there are probably upcoming repairs.
4. Are you Repair Ready?
This is mostly a question of savings. At some point in time, you will have to make a repair to your car. It could be anything from replacing batteries, to brakes, to the transmission. You don’t need to worry about this immediately, especially if a mechanic checks the vehicle before purchase, but make sure you have at least $500 set aside in savings for the eventual repairs you will need to make.
Buying a car is a big purchase with long-term financial implications. Take time to make sure you find a car that is really worth the cost and that fits into your budget. Happy hunting!
Written by Mckenzie Candalot, Staff Writer – Mckenzie Candalot graduated from the College of Idaho with a B.A. in English Literature. She has a passion for written language and helping other women take control of their finances. When not blogging or reading, she enjoys cooking and spending time with loved ones.